residential area vs territory

residential area and territory both are nouns.

Word	Noun	Adjective	Verb	Adverb
residential area	Yes	No	No	No
territory	Yes	No	No	No

As nouns, territory is a hypernym of residential area; that is, territory is a word with a broader meaning than residential area:

residential area: a district where people live; occupied primarily by private residences
territory: a region marked off for administrative or other purposes

Other hypernyms of residential area include district, dominion, territorial dominion.

residential area (noun)	territory (noun)
a district where people live; occupied primarily by private residences	an area of knowledge or interest
	a region marked off for administrative or other purposes
	the geographical area under the jurisdiction of a sovereign state